"I think you are going to see increases in the value of homes by between 3% and 5% year over year," Stumpf said. "I think we will see a mortgage market that is largely dominated by purchase money. It would not surprise me if we were in a $1 trillion- to $2 trillion-mortgage marketplace."

If that occurs, nationwide home foreclosures should continue to fall.

That's because a healthier housing sector raises the value of virtually all homes, leaving more cash value in residential homes. In addition, a stronger jobs market puts more cash in the pockets of Americans, further reducing foreclosure pressure, while the market may have seen most of the problem home mortgages already fall off the market.

All of that adds up to an increasingly thinned out foreclosure sector, and a healthier housing market.

According to RealtyTrac, nationwide residential home foreclosures have fallen by 53% from the market peak in 2010, and the foreclosure level of 1.4 million total last year just about matches 2007s total, when 1.3 million foreclosures hit the market.

Some states still face a struggle with foreclosures, with Florida, Nevada, New York, New Jersey, Illinois, Maryland and Ohio topping Realty Trac's "severely troubled" mortgage list. In fact, New Jersey, Maryland and New York all saw increases in foreclosures from 2012 to last year, as most states saw decreases.

A big part of the foreclosure hangover in New York and New Jersey is that the legal wrangling between lenders and struggling homeowners in those states takes so long -- 1,0129 days and 999 days, respectively.

Still, the bigger picture reveals a sunnier homeownership climate, especially compared with the dark days of 2009 and 2010.

"Millions of homeowners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst -- both in the form of homes lost to directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales," says Daren Blomquist, vice president at RealtyTrac. "But the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014."